Bill Gates’ Robot Tax Is a Bad Idea, Says International Federation of Robotics

Bill Gates’ Robot Tax Is a Bad Idea, Says International Federation of Robotics

In the News

March 06, 2017

The widening adoption of industrial automation has led to fears of job losses and unequal distribution of wealth. In response, some robotics proponents have talked up the benefits of reshoring manufacturing and service functions, and others have suggested a universal basic income.

Microsoft co-founder Bill Gates recently added to the debate by agreeing with recommendations that automated sources of production be taxed. In response to Gates, the International Federation of Robotics issued the following statement:

Why Bill Gates’ robot tax is wrong

Bill Gates’ latest idea to tax robots aims to solve a problem that does not exist. Empirical analysis of economic data and forecasts shows that automation and the use of robots create new jobs by increasing productivity. This is in line with the historical experience of technological revolutions, last seen when computers and software automated the business world.

To tax production tools instead of their profits would have a negative impact on competitiveness and employment. This is presumably why the European Parliament rejected the idea to impose a robot tax, and the International Federation of Robotics strongly agrees with that decision.

According to the McKinsey Global Institute, more than 90 percent of jobs will not be fully automatable in the future. Instead, robots and humans will work together. The positive impact that the increased productivity of robots has on employment can already be seen in the most advanced industrial nations.

The U.S. automotive industry, for instance, installed more than 60,000 industrial robots between 2010 and 2015. During this same period, the number of employees in the US automotive sector increased by 230,000.

The same trends can be seen in the most advanced economies in Europe and Asia. Moreover, recent research by the OECD on the future of productivity shows that companies that employ technological innovation effectively are up to 10 times more productive than those that do not. This has a positive impact on competitiveness.

Profits, not the means of making them, should be taxed

A robot tax would make these much-needed investments in technology more expensive for companies.

“Profits, not the means of making them, should be taxed,” said Joe Gemma, president of the International Federation of Robotics.

Research shows that automation actually results in a positive tax balance for social systems. Repetitive or dangerous tasks are replaced by industrial robots, leading to the...